ike’s differentiation and

leadership strategy :
Nike’s cost leadership
generic strategy sustains
competitive advantage
based on
costs. In this generic
strategy, the company
minimizes production
costs to
maximize profitability or
reduce selling prices. In the
late 1990s, Nike reduced
costs and the selling prices
of its athletic shoes and
other products. This
generic
competitive strategy helped
the company regain its
competitiveness, especially
against Adidas. Also,
Nike’s differentiation
generic strategy provides
unique
products. For example,
the company integrates
cutting-edge designs for
its
shoes. The combined cost
leadership and
differentiation generic
strategies boost
Nike’s performance in the
global industry. A strategic
objective based on the
cost leadership generic
strategy is to grow the
company’s competitive
advantage
through new
technologies to reduce
production costs. A
financial objective
based on the
differentiation generic
strategy is to maximize
Nike’s profit
margins, such as on new
sports shoes. Nike
implemented this intensive
strategy
in its early years, such as
when it introduced apparel
and sports equipment to its
product mix. Initially, the
Nike brand was on athletic
shoes only. Diversification
can support Nike’s generic
competitive strategy of
differentiation through new
businesses that supply
materials for product
innovation in the athletic
shoes,
apparel and equipment
business. A strategic
financial objective based
on this
intensive growth strategy is
to improve Nike’s financial
risk by entering other
industries.
Nike decided to focus on
investing in their R&D
department: they focus on
individual benefits such as
newest technology of
producing clothes that let
the
skin breathe, footwear
specific structure allowing
to avoid or reduce injury
and
get the maximum comfort,
new electronic devices
helping people to stay
healthy
and active. As a result
Nike's products have
become very loved not
only by a
standart buyer but also by
professional athletes. Their
Leader R&D strategy has
helped them a lot in
achieving their
differentiation proposing
a product of
quality for an affordable
price. The advanced R&D
strategy has been started by
Nike a while ago, in
the end of 1970s when
they introduced a new
air
cushioning system for their
footwear. Since then
developing this project and
creating new ones Nike has
strenghtened its position of
the leader in R&D in rhe
Nike has a moderate cost
leadership strategy within
its industry. There are a
few
different choices in the
marketplace for buyers to
obtain athletic
shoes, apparel and the like,
however Nike's products
are distinct for a variety of
reasons that enable them to
derive economic profit
from other means than
simply controlling costs.
With that said, the
hypercompetitiveness of
the few
rivals Nike has means that
they do have to do their
best at minimizing said
costs
as to maximize their
market share and margins.
Nike has significant
economies of scale. As the
world's largest producer of
athletic textiles and
equipment, Nike dwarfs the
competition. A caveat to
their
manufacturing processes,
Nike outsources all of these
processes to many Asian
countries that does three
things, (1) keeps Nike as a
company very lean, (2)
provides a cheap labor
source, and (3) if a
manufacturer/supplier
increases costs,
Nike can simply relocate to
a cheaper option further
driving down their
marginal
costs. Other companies
without Nike's clout can't
match this ability. Also
considering the worldwide
demand that Nike has, the
distance to market from
suppliers is negligible and
not a source of a
diseconomy of scale.
Nike definitely has low
cost access to factors of
production. The enormity
of Nike in respect to their
suppliers gives them a huge
advantage in
production negotiations.
Due to their high volumes
for products, the cut-throat
low cost nature of selecting
a manufacturer, and
coupled with the fact that
Nike's
suppliers depend so heavily
on them for their own
success that they have little
to
no bargaining room toward
raising prices, allows Nike
to continuously enjoy
low costs of production
NIKE
ADVERTISEMENT
STRATEGIES
When we think about Nike’s
marketing strategy, our minds
bring us directly to think about
the slogan “Just do it” or the
logo called “Swoosh”. Nike is
one of the most successful and
recognised companies
worldwide and to discover
how Nike is able to be
successful in
advertisement and how the
company is able to be
eighteenth on the rank of the
most
valuable companies in the world
(Forbes, 2015) is a hard
challenge that everybody would
like to accept.
Nike promotes its products
through different channels of
communication and it is able to
sell
through the prominent effort
of its merchandise which
creates overall positive
brand
awareness. Nike uses different
ways to advertise and promote
its brand. The main medium
used by Nike to advertise are
through television, magazines,
outdoors and the Internet. The
television is the most
powerful way where Nike
advertise its products with
great and
attractive adverts. And thanks to
the wide coverage of the
television, it allows Nike to
reach
every house all over the
world. The magazines
advertisement is not as
strong as the
television one but it can
target sport-interested people,
business people or, in
general,
people who love reading.
The outdoors advertisement
is referred especially to
road
billboards or billboards on
vehicles like buses. As for the
Internet, it a very strategic and
convenient way to advertise
because of the advantage of the
low cost of the advertisement
and the different ways to
advertise from videos and
images to social media
campaigns
NIKE ADVERTISEMENT STRATEGIESWhen we think about Nike’s marketing strategy, our minds bring us
directly to think aboutthe slogan “Just do it” or the logo called “Swoosh”. Nike is one of the most
successful andrecognised companies worldwide and to discover how Nike is able to be
successful inadvertisement and how the company is able to be eighteenth on the rank of the
mostvaluable companies in the world (Forbes, 2015) is a hard challenge that everybody wouldlike to
accept. Nike promotes its products through different channels of communication and it is able to
sellthrough the prominent effort of its merchandise which creates overall positive
brandawareness. Nike uses different ways to advertise and promote its brand. The main mediumused by
Nike to advertise are through television, magazines, outdoors and the Internet. Thetelevision is the
most powerful way where Nike advertise its products with great andattractive adverts. And
thanks to the wide coverage of the television, it allows Nike to reachevery house all over the world.
The magazines advertisement is not as strong as thetelevision one but it can target sport-
interested people, business people or, in general,people who love reading. The outdoors
advertisement is referred especially to roadbillboards or billboards on vehicles like buses. As for
the Internet, it a very strategic andconvenient way to advertise because of the advantage of the low cost
of the advertisementand the different ways to advertise from videos and images to social media
campaigns